In general a CODEC is probably just some DAC's and ADC's with a little control logic. They are very simple, and leave the tasks of any special sound processing to the host CPU. That slows down your system since now the CPU has more work to do.

The SBLives had built in DSP's specially designed for sound stuff. The DSP's can actually perform much of the sound processing that would normally be done by the host processor. This frees the host processor up for other tasks. In a game that is on the verge taxing your systems resources, this kind of difference is immediately noticible as a percieved increase in system performance.

Since most all games these days require some level of signal processing on the sound data, these cards are almost a requirement for a gaming system. There are better choices these days than the live however.